Hockey admits: We can’t shut down the NBN

news Shadow Treasurer Joe Hockey yesterday admitted that the Opposition would find it hard to “shut down” the National Broadband Network project completely if it wins the upcoming Federal Election in September, and would release further details “in the next few weeks” about the Coalition’s plans for the project.

However, yesterday Hockey appeared to swing more towards Turnbull’s view of the future of the NBN, when asked by a caller on radio 2UE (the full interview is available online here, it’s the last audio file; the NBN bit is at the end of the file), “how soon will you shut down the NBN”. “I don’t know if we can, I think we’ve got to reformat it,” Hockey responded. And then, asked by the show’s host “why not just stop it”, the Shadow Treasurer added: “Well we don’t know what contracts this mob have entered into, lord knows what’s going to happen.”

“You’ll hear more from us about what we’ve got planned for the NBN in the next few weeks,” he added. “We’ve talked a lot about it, we’ve done a lot of research, we’ve done a lot of costing, we’ll have more to say about the NBN.”

Asked whether a Coalition administration could sell the NBN, Hockey said he didn’t believe the NBN was worth anything. And he added a later comment about the benefits of wireless technology. “Look, you and I and many others walk around with mobile phones and mobile technology, mobile wireless technology, is the stuff that empowers us during the course of our day.,” he said. “We’re not carrying around cables from the back of our car or out of our pocket.”

The news as the Coalition continues to stonewall questions about the details of its rival broadband policy to the NBN. In its ‘Real Solutions’ policy document published this week, the organisation included only a scant few paragraphs relating to its broadband policy, noting that it would deliver high-speed broadband that was both affordable for families and business and cost-effective for taxpayers.

“We will for the first time do a fully transparent cost-benefit analysis of the National Broadband Network, to find out the quickest and most cost- efficient way to upgrade broadband to all areas where services are now unavailable or sub- standard,” the document states. “This is the cost-benefit analysis Labor didn’t do before committing to spend tens of billions of dollars on the NBN.”

“We will roll out super-fast broadband using whichever is the most effective and cost efficient technology and we will use existing infrastructure where we can,” it adds. “We will roll it out faster to high priority areas. We will end billions of dollars of wasteful spending on the NBN and deliver more of the modern infrastructure we urgently need while encouraging competition wherever possible to put downward pressure on prices.”

opinion/analysis
This month I made a bet with a senior telecommunications industry figure about the Coalition’s plans for the NBN. If the Coalition wins government and takes Abbott’s professed approach to the NBN (broadly, shutting it down and walking away), I have committed to buying this figure dinner to the value of $200 at a restaurant of their choice.

However, if the Coalition wins government and takes Turnbull’s approach to the NBN (broadly, retaining its bones, including NBN Co, but re-shaping it and focusing on FTTN), then they’ll buy me dinner to the value of $200 at a restaurant of my choice. If Labor wins, all bets are off.

Right now, I suspect what is happening inside the Shadow Cabinet is that Malcolm Turnbull is trying to talk some sense into long-time NBN critics such as Tony Abbott and Joe Hockey, who would likely take a very radical scalpel to the NBN if they take power in the Federal Election coming in mid-September this year.

And he had better. Because under no circumstances is it a realistic policy for the Coalition to simply shut down NBN Co, sacking some 1,700 staff and walk away from a situation where construction is under way to hundreds of thousands of homes and tens of thousands of people are already using the NBN’s services.

You can’t just walk away from a situation where billions of dollars in contracts have been signed and a ten-year fundamental infrastructure program is in place. That would demonstrate a ludicrous failure of responsibility on the part of the Coalition, and I’m sure Turnbull knows this. Abbott had better realise it soon and listen to the Earl of Wentworth’s common sense on this issue; otherwise an Abbott Prime Ministership will be characterised by the absolute debacle of the shutdown of the NBN project; an event which will live in infamy forever.

None of this is to say that I believe Turnbull or anyone else in the Coalition has a better policy right now than the NBN. However, on the scale of lunacy to common sense, Turnbull’s FTTN vision for the NBN is a great deal more rational than the rubbish Abbott has been spouting for the past several years about ‘shutting down’ the NBN entirely. It’s good to see that Hockey has been listening to Turnbull’s views on the issue, and I hope to see a cohesive policy emanate from the Coalition on this issue over the next few months; costings, as Hockey promised, included.

50 COMMENTS

If only they would leave the politics aside and just say that “FTTH is the best long term solution to Australia’s telecommunications needs. The NBN as it currently stands has bipartisan support.” Wireless is not the answer – all those mobile devices Mr Hockey talks about are bouncing off towers connected to each other via fibre. If he wants a speedy service then he’ll need more towers. FTTN is a halfway solution that will just put more pressure on Telstra’s copper network (or is it NBN Co’s now?). Whatever money they think they’ll save in not rolling out last mile of fibre to homes will well and truely be replaced by copper maintenance and replacements.

Looks like it’s going to be an interesting 7 months election campaign.

Well one very clever thing to come from JG locking down the election date, (not that this should be a surprise to anyone considering she signed and agreement with the Indy’s and greens to run the minority gov full term), is that it also locks the LNP into running with Tony “the luddite” Abbott – if the LNP where to dump him now they’d prolly guaranteeing loosing the next election. Although with Mister -63% popularity running the show I personally think they’ll lose anyway!

In the 3 years since the last election, technology has moved on, as have telcos in other countries, the LNP really hasn’t. Still trying to give us outdated tech & claim it’s “next generation”.

Cracks are forming in the Liberal party leadership on this issue, as it is a huge issue. It’s akin to saying “we are going to shut down the freeways between Melbourne, Canberra, Sydney, & Brisbane, & upgrade it to a 1 lane road”.

I don’t believe anything they say on technology because they don’t understand anything of technology.

MALCOLM TURNBULL:
“Now what we will do and I give this promise, when we get into government, if we do, we will have a thoroughly transparent audit of the NBN so that people will understand precisely what it will cost and how long it will take to complete the project on the current plan and what the implications were in savings of time and cost would be of an alternative approach of the kind that I have described.”

“If Labor wins, all bets are off.”
Renai, what if the LNP wins, and NBN isn’t shut down, or reshaped?

But as it goes, the LNP would be insane to shut it down with the amount of money already involved.
No company in their right mind would buy out what is there currently. The Wireless and Satellite portions will be sucking money until the fibre is caught up to make it equitable.
And as usual, Joe Hockey must be smoking pot to think otherwise, or even consider a wholly wireless network.
The only logical and sensible choices are to continue, or downgrade to FTTN.
But, FTTN does not offer any FUTURE for this country. It’s a dead end technology. Like vacuum tubes, they only get you so far before outstrip its capabilities.

Hopefully we’ll start hearing from some of the larger tech companies now about their stance on the NBN, and what they’ve been planning to do with it, and maybe sway some people.

This month I made a bet with a senior telecommunications industry figure about the Coalition’s plans for the NBN. If the Coalition wins government and takes Abbott’s professed approach to the NBN (broadly, shutting it down and walking away), I have committed to buying this figure dinner to the value of $200 at a restaurant of their choice.

However, if the Coalition wins government and takes Turnbull’s approach to the NBN (broadly, retaining its bones, including NBN Co, but re-shaping it and focusing on NBN), then they’ll buy me dinner to the value of $200 at a restaurant of my choice. If Labor wins, all bets are off.

Second: I think more and more that Telstra is the key here. I guarantee that they are working away right now on a plan to bring to an Abbott government and keep whispering sweet noises in Tony Abbott’s ear.

“Let us just take this horrible thing off your hands,” they will coo softly. “No more NBNCo – we’ll solve all your problems! Just give us some wiggle room on coverage, ease up the ACCC, and let us cherry-pick the areas that will still get fibre. Oh, and a regulatory holiday too? That’s not toooooo much to ask for making the big bad Labor government monopoly go away, is it?”

What worries me is the wording of what they plan to do. It sounds like another plan to subsidise areas with really bad or no broadband. That worked so well in the past. As to upgrading areas with substandandard broadband is 12Mb what have often touted as acceptable? Maybe even upto 12Mb. Does that mean anywhere with ADSL2 or maybe even 4G is not part of the plan?
The way they play word games is terrible. Turnbull cannot answer a straight question on broadband, neither can anyone else there. Until I see an unambiguous, in writing document I will continue to assume, as seems to be the case, that they are just paying lip service to BB and have little plans of any substance.

I think the question should be “How soon will you shut down the NBNCo?”.

I don’t think Abbott, Hockey at al care one way or the other what technology is used as long as it is built and operated by the private sector. I suspect (but can’t prove) the CBA promised in the mini-campaign document will be angled toward maximising private sector involvement.

I said elsewhere that I think election time is going to be pushing out some very interesting numbers. Personally I’m a little surprised the election is in September and not October, as the quarterly stats (in a number of areas) for September would be a great campaign tool. Particularly with the NBN where a lot of the ramp up will start to flow through as connections. This just reinforces that belief.

If there are contracts in place to effectively cover 40% of the population, its hard to stop at that and leave the other 60% to fend for themselves.

But the flipside of that is that because of how the NBN has focussed more on regional areas, at least the cherry areas will still be there to encourage private FttP development…

The government could gazump the “audit” promise by MT by requesting something be done, under their guidelines (that will likely favour an FTTP rollout) 12 weeks before the election. If they did it now, it wouldn’t be finished by September, and if it didn’t say what they wanted they couldn’t not release it for fear of political fallout.

Yeah, I said elsewhere that NBN Co is going to continue as is, until told otherwise, and that means fresh contracts being signed between now and Sep 14. Which will impact on the next 3 years.

If you figure the build will be up to full speed by then, thats 6,000 properties a day for 365 days for 3 years, or roughly 6.5m properties commited to. That’s 2/3rds of the population, commited by contract.

Going to put the Liberals in an interesting position if they win. Do they honor every contract, and thus commit to 66% of the population getting FttP? What do they give the remaining third?

I can see NBN Co signing a lot of contracts in July, when the expected June completions are done. Business as usual.

That meeting made it clear—even a lot of Liberal luvvies asked about why their phone lines were so awful—that the copper is in no state for FTTN. So there is *no* alternative broadband proposal from the Liberals. Do not kid yourselves about this! No more NBN if the LNP are elected 14th Sep.

You are exactly right, Political Animal. Murdoch wants it stopped. Definitely no Multicast capabilities, either. We can’t have competition, can we?
“Do not kid yourselves about this! No more NBN if the LNP are elected 14th Sep.” needs to be shouted from the rooftops.
I received an emailed statement from MT via my local MHR, John Alexander, in answer to a direct question from me: ‘Will the Coalition continue with the NBN rollout in my area, given it’s part of the projected 3 year plan?’ His answer? “No, our promise is not to roll out FttH to every house – just ensure every house has very fast broadband. We will still have the NBN in place but will use a mixture of technologies to ensure Australians get better broadband sooner, cheaper for taxpayers and more affordably for consumers.”
So my street, which currently has HFC (which can be very fast when few people are using it) will get nothing from any rollout by the Coalition. NOTHING.

Well, not weird, I guess, just another example of “anything but what Labor are doing” thinking.

But they gave themselves a phenomenal cash pile for pork barrelling when they sold off Telstra. What makes them think people wouldn’t be queuing up to buy shares in a company with a monopoly over an essential service, with a regulated 7% return on investment? I know I’d be willing to sink a few $thousand into that kind of almost guaranteed return on investment, and I’d imagine a few of the big super funds would be eyeing it off, too!

I guess it can’t be sold off until it’s actually at the stage of making a return, though, which will take a few years, probably beyond the election after next.

It’s the same angle Turnbull is taking. Say enough to make people think they are a “safe” vote with respect to Broadband.

The merest hint and Renai is thinking it’s time to call in the bet. Good luck, sir. I think you might be short $200 if LNP win, though. :)

Should they win, will broadly speaking halt investment, NBNco will be neutered and or sold to a commercial entity such as Telstra. They may keep existing agreements but the solution, as it stands, will be unable to be completed due to the funding levels the LNP state are unacceptable.

If they commit to honoring whatever contracts are in play after the election, at what point does the bet deem a winner? I’m thinking (yet again) that there might already be enough premises under contract for both of you to be right.

The LNP could walk away from the NBN, and still be commited to FttN over 40 or 50% of the population. There’s nothing to suggest Labor/NBNCo wont be signing new contracts between now and September 14, so there’s a real chance Labor could simply sign enough contracts to force the Liberals into just finishing the FttP rollout.

Standard business practice for NBN Co, up to the point they are told otherwise (ie, in a post election LNP world) would to continue being a business and following their business plan. Which means new contracts as other sites are completed.

They will have to allow existing contracts to run, unless they are so thick that they would prefer to pay hundreds of millions in compensation claims arising from an immediate abort.

But with Tony Abbott saying one lot of things, Joe Hockey a different lot, and cunning old Malcolm Turnbull trying to take the debate in a different direction to both of them, we might be excused for thinking that there could be a bit of a fit-up going on somewhere.

And it sometimes seems that Turnbull gets an easy run from parts of the media because he is a former journo himself.

Bookmark their comments today, because this all smells like a group caught out to me. They werent prepared for Gillard to go public like this, and are scrambling to effectively get into election mode now rather than post-budget like they would have expected.

i suspect they have indeed been caught out. the Telstra pit and pipe remediation is worth something. the satellites are worth something, as well as the landing stations to be ready for the satellites to be put up in early then late 2015. the GIS work to line up connections with addresses is worth something.

the (i presume contract protected) completion of Tasmania by 2015 is definitely worth something, smallest state notwithstanding. the backhaul work is worth something. if Joe was really thinking about it he wouldnt have said what he did – its just too easy to show he has no idea what he was talking about.

i really really hope the senate outcome is there to block such uninformed meddling. and as ive said before i wont be upset if there are enough indies to necessitate another minority government in the HoR. the alternative is that a decent policy gets trashed and the kibbles get handed over directly to Telstra in the worst case, entrenching the very market power the NBN policy was designed to escape.

im not averse to Telstra per se, but to the concentration of and ability to abuse market power that would come if the bits were vested in one vertically integrated entity under that worst case scenario. quite frankly i dont see how a competitive market could arise following that outcome. if Telstra pulled out of retail entirely or the kibbles were vested into a network operator only, thats another thing. i could just about deal with that, but no further.

“You’ll hear more from us about what we’ve got planned for the NBN in the next few weeks,” he added. “We’ve talked a lot about it, we’ve done a lot of research, we’ve done a lot of costing, we’ll have more to say about the NBN.”

Really? So are you finally going to release Turnbull’s “fully costed” policy?

Honestly Hockey, I’ll believe this when I see it. I’m sick and tired of the uncertainty. I actually have commercial ventures in discussion that depend on, not necessarily the NBN per se, but at the very least some kind of certainty to do with Telecommunications Infrastructure in Australia in the coming years. I am sure I am not the only one.

Partially off-topic, but Hockey is extremely good at making it sound like the LNP are ready to just step into government and start fixing the ‘mess Labor has made’. Maybe he should have been leader of the opposition instead of the Mad Monk.

This will appease the dyed in the wool Coalition voter (as long as they stop what they can of this white elephant) and could just be enough to lure the vaguely conservative, swinging tech voter, back the Coalition’s way.

True
Not recognised, you actually have to do some research to ascertain the facts which the MSM and even educational and economic tomes manage to whitewash.
Fraser and Howard almost screwed the economy, the greatest number of small/medium businesses wiped out as a percentage ever, 10% unemployment, peak of 21% interest. Admittedly they did not have a large savings to start, just a small humble surplus and faced a global financial crisis mid term, but they screwed it up completely

I’m sure he’s tempted. And yet, as a perverse outcome, signing long-term contracts doesn’t work to the advantage of the ALP, electorally.

Because then a voter can say “I like the NBN, but I’m not so sure about Labor. I know! I can vote in the Libs, safe in the knowledge that I’m still guaranteed to get the NBN.” Not the outcome they’re looking for.

But I do think that Conroy should lock in every forward contract where it makes prudent commercial sense to do so. Father all, if you’re building a railway line or freeway, you don’t plan expenditure on the basis that another government might just come along and cancel the whole thing at any time. That doesn’t make any sense – and neither should the Coalition’s promise to shut down the NBN make any sense, either.

Would like to invite Hockey to the wilds of the far northern suburbs of Sydney to try out his mobile internet devices. We have patchy mobile phone reception, mobile internet is next to impossible. We need the NBN also for competition. We have no choice but cable as too far for ADSL. Costs us more than it should.

I doubt Joe uses his tablet/phone much outside of the cities, and lets face it, you don’t actually get much productivity from those types of devices, they’re more a convenience thing. Just goes to show how out-of-touch with workers the Libs really are…

And I have no problem with them doing a CBA, as long as it factors in the productivity and social aspects for Australia as a whole, not just the dollars and cents of the corporations…

They cant sell the NBN till its finished and its not finished until the build is completed, which is determined below, direct copy and paste from corporate plan.

For the coalition to sell it they would have to build it as designed or do a new corporate plan. But i dont know the ins and outs of politics and law.

Id say the Coalition have a tough battle on their hands trying to change the corporate plan pulling strings and making changes to as they go. Hence they want NBN Co to investigate alternatives now, gives Coalition leverage to apply alternatives done under current gov power.

Personally if i was NBN Co i would do a thing towards FTTN.

For the Coalition to call their plan a NBN leaves a sour taste in my mouth.

Ownership

NBN Co must remain in full Commonwealth ownership until the Communications Minister declares that the National Broadband Network is built and fully operational. A sale of NBN Co can only occur after a Productivity Commission inquiry into the NBN regulatory framework has been considered by a Parliamentary Joint Committee.

The Libs will stop work as soon as they can, they are just jonesing to impose austerity (aka achieve a surplus) and huge contracts doesn’t fit in with that. So contracts issued will be worked out but no new contracts issued.

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